Bord Iascaigh Mhara has withdrawn an application to develop a major salmon farm off the west coast. 

The agency had sought an aquaculture licence to construct a farm off the coast of Inis Oirr in 2012.

It planned to run a 15,000 tonne operation there.

The proposal met with widespread opposition among sections of the local fishing community. 

In a statement this afternoon BIM said it was withdrawing the licence application in light of a new Sustainable Aquaculture Development strategy.

This sets limits regarding the scale of offshore salmon farms and was contrary to the size of the proposed development in Galway Bay.

The decision has been welcomed by groups who had opposed the BIM plan.

Enda O'Conghaile, chairman of the Inis Óirr co-operative, said islanders had raised concerns about the proposal on a number of fronts.

Residents said the location for the development had not been properly analysed, they questioned BIM data regarding the impact and danger from sea lice and said the staffing levels on the farm were "way in excess" of industry norms.

Islanders are particularly pleased because they say the integrity of Galway Bay as a spawning ground for wild fish and its importance for shell fish has been safeguarded by Bord Iascaigh Mhara's decision.

A spokesperson for BIM said it would review its options in the next 12 months. The agency estimates in the region of €500,000 has been spent on the plan to date.

Brian Curran, Spokesperson Galway Bay Against Salmon Cages, welcomed today's decision by BIM and believes it was influenced, in part, by the campaign against the fish farm.

Speaking on RTÉ's Drivetime he said he hopes the application has now been totally withdrawn.

Mr Curran said fish farms cause devastation to salmon wild stock and there are no controls and very little regulations. 

He said millions of euro and a lot of jobs have been lost in the Connemara area because of the salmon farming industry.